impound
verb
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Definition of impound
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Examples of impound in a Sentence
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According to the shelter, the pit bull has been impounded. — Dave Quinn, PEOPLE.com, "Connecticut Dog Owner Abandons 'Amazing' Pit Bull with Note Explaining They Couldn't Keep Her," 30 July 2019 It was impounded by state police and later searched, but there was no sign of foul play, police said. — Staff And Wire Reports, USA TODAY, "Original Mouseketeer Dennis Day's former handyman arrested in his death in Oregon," 7 July 2019These example sentences are selected automatically from various online news sources to reflect current usage of the word 'impound.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
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More Definitions for impound
impound
verbFinancial Definition of impound
What It Is
In the real estate world, an impound is an account that mortgage companies use to collect property taxes, homeowners insurance, private mortgage insurance and other payments that are required by the homeowner but are not part of principal and interest. Impound accounts are also called escrow accounts.
How It Works
Let's say John Doe buys a house and borrows $100,000. The interest rate is 4%, and the loan is a 30-year mortgage. His monthly payment is $477.42, which includes interest and principal.
John Doe didn't put down 20%, so the lender requires an impound account. Every month, another $250 is deducted automatically from John's checking account and put in the impound account. This ensures that the money is there to pay the insurance and property tax bills when they arrive every six months.
Why It Matters
Impound accounts mitigate a lender's risk because they ensure that the homeowner won't lose the house (which is the bank's collateral for the mortgage) due to tax liens or unpaid insurance bills. Usually, the mortgage lender is responsible for paying the tax and insurance bills out of the impound account on time; however, if the mortgage lender fails to do so, the homeowner is still on the hook.
Usually, lenders require impound accounts when the borrower puts down less than 20% on a house. If the borrower puts down more than 20%, impound accounts aren't always required, though they are often convenient for ensuring that the bills are paid.
Source: Investing Answers
impound
verb
English Language Learners Definition of impound
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impound
transitive verb
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Legal Definition of impound
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